A Close Look at December Stock Fund Flows

By Sam Mamudi

That amount of cash coming in is just what the industry needs, given that December’s flows were so poor — $11.2 billion of net outflows from stock funds, greater than the $9.9 billion of net outflows in Novmeber, said analysts at Sandler O’Neill, who took a close look at how some of the key fund companies fared.

Among the observations: While stock funds at AllianceBernstein (AB) saw net outflows of $120 million last month, that’s better than the $300 million of net outflows in November. Meanwhile, Franklin Resources (BEN) suffered $950 million of net outflows, a sequential improvement from November’s $1.2 billion of outflows.

Among fund companies that saw worse month-over-month stock outflows were Janus Capital (JNS) and Legg Mason (LM) — both saw net outflows of $1.1 billion, in Janus’ case that was compared to $840 million in November and $800 million for Legg Mason. T Rowe Price (TROW), which broke even on net flows in November, saw $1.6 billion of outflows from its stock funds.

So the active stock managers took a beating last month, but maybe the tide is finally turning. As the Sandler analysts note:

Further examination shows investors continued to avoid active equities, as related outflows surged from $16 billion in November to $30 billion in December. Conversely, ETF inflows of $18.8 billion last month were nearly triple the $6.5 billion of inflows in November. That said, industry data thus far in January shows shifting investor sentiment.

About Focus on Funds

As exchange-traded funds and other investing vehicles have ballooned in number, the task of figuring out what works well and what doesn’t has only gotten harder. Barrons.com’s Focus on Funds looks under the hood of ETFs, mutual funds and hedge funds for overlooked values, actionable ideas and the latest pitfalls for fund investors.

Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.